Chapter 10: Dynamic Models

A dynamic microsimulation model is a model that simulates the behaviour of micro-units over time. Orcutt, Greenberger, Kobel, and Rivlin (1961) described the first dynamic microsimulation model following the inspiration of Orcutt’s (1957) article. Most dynamic microsimulation models that have developed in following decades trace a direct or indirect link back to this model. Urban planners use microsimulation techniques to estimate traffic flows, while in the field of economics and social science, microsimulation is often used to analyse the social economic policies. In this chapter, we shall review how dynamic microsimulation in social science has developed, with main focuses on the economic models developed in the past decade.